This project is intended to describe and analyze the relation between alcohol and drug use and the effects of this use on the wages and labor supply of young workers. The central hypotheses to be tested are three: first, alcohol or drug use has an impact on the labor market experience of young adults, depending on characteristics of use; second, the impact of alcohol and drug use is larger than would be predicted on the basis of analysis of either substance independently, and third, substance abuse has an impact quantitatively different than use and this difference is due to social, psychological, and economic variables in addition to the characteristics of use. The National Longitudinal Survey of Youth Labor Market Experience, 1979-1988, provides the data base for the investigation, and the methodology employed is derived from statistical and economic theory. Wage and annual hours worked equations will be estimated for "nonusers" and for "users" taking into account possible self-selection bias. Measurement error models will be used to determine the sensitivity of the estimated parameters to possible under-reporting of substance use among select groups of surveyed respondents. Estimates from the wage and hours worked equations will be used to predict the difference in labor income between an alcohol and/or drug user and a nonuser. Comparisons between users/nonusers will also be made by sex and race. Policy implications of estimated user/nonuser differences will be discussed in the context of the overall social cost of substance abuse.